OIL DRILLING TO COMMENCE IN CHAD BASIN FROM OCTOBER ~Kachukwu



The minister of state for petroleum
resources and group managing director of
the Nigerian National Petroleum
Corporation (NNPC), Dr Ibe Kachikwu, has
disclosed that drilling activities will
commence in the Chad Basin in the fourth
quarter (Q4) of this year.
Kachikwu who disclosed this yesterday
through the group general manager,
Group Public Affairs of the NNPC, Garba
Deen Mohammad, stated that the
commitment of the federal government
and the NNPC to explore for oil and gas
in the inland basins, especially Chad
Basin and the Benue Trough, is
unwavering and on the front burner.
Specifically, he said, the NNPC through
its Frontier Exploration Services and
Renewable Energy Division (FESRED) had
progressed reasonably with seismic
acquisition activities in the Chad Basin
frontier area till insurgency necessitated
the suspension of operation there.
He said eight phases, out of the planned
12 phase project, to cover 3, 550 sq.km,
had been acquired by the date of
suspension of operation on November 24,
2014.
“A total of 1, 962 sq.km have been
acquired and processed; interpretation is
currently ongoing at about 90 per cent
completion, and drilling activities will
commence by the last quarter of 2016,’’
Kachikwu disclosed.
He explained that the seismic activities
were carried out with due regard to
environmental protection and in
accordance with international best
practices, and was being handled by the
Integrated Data Services Ltd, a subsidiary
of the NNPC, and BGP, a subsidiary of
China National Petroleum Corporation
(CNPP).
Kachikwu noted that exploration in the
Chad Basin was aimed at increasing the
nation’s oil and gas reserves and adding
value to the hydrocarbon potential of the
Nigerian inland basin, providing
investment opportunities, boosting the
economy as well as creating millions of
new jobs.
“The decision to diversify our business
portfolio is about all of us and about the
future of our dear country; the vision is
clear, and we are determined not to fail,’’
Kachikwu added, while inviting the private
sector and venture capitalists across the
globe to partner with the NNPC in planned
Special Purpose Vehicles (SPVs) to
profitably harness the enormous energy
resources in Nigeria.
In March this year, President Muhammadu
Buhari had disclosed that his
administration had plans to extend oil and
gas exploration into new fields in the
Chad Basin in the North East and in the
coastal states, like Lagos, where oil has
been discovered in commercial quantity.
The president, who spoke through Vice
President Yemi Osinbajo, while declaring
open the 6th African Petroleum Congress
and Exhibition (CAPE VI) in Abuja,
disclosed that, as part of strategies to
reposition the Nigerian oil and gas
industry, his government had commenced
the process of implementing carefully
conceived initiatives which would see the
country hitting a production target of 2.8
million barrels per day (bpd) of crude oil.
Meanwhile, findings showed that oil
exploration in the Chad Basin dates back
to 1978 and that about 23 wells had been
drilled and abandoned in the north over
the years; however, the debate about the
region having proven oil in commercial
quantity as well as perceived lack of will
for intensified search had delayed the
project till date.
‘Oil to trade above $60 in 2017’
Oil supply growth by OPEC countries will
not match the output declines being
experienced by non-member producers
and this could lead to higher crude prices
next year.
To balance the oil market by 2020, US oil
and gas capital expenditure will have to
increase by at least 50 per cent, leading
oil prices to trade above the current
forward strip and into a $55-70 per barrel
range, said a report by Bank of America
Merrill Lynch entitled, “Global Energy
Weekly: The oil supply cliff-hanger”.
There is still a large set of drilled but
uncompleted shale wells that could come
on stream over the next few months and
US companies are expected to play a role
in stabilising non-OPEC supplies, it
explained.
However, cartelized producers at the
moment have limited spare productive
capacity or planned investment to meet
demand on a forward basis, leaving the
oil market exposed to huge supply
uncertainties over the next five years, it
said.
A string of twists and turns ahead of
producer meetings in Vienna and Doha in
recent months have turned oil market
developments into a serial drama.
“Yet one fact remains in this OPEC cliff-
hanger: non-OPEC oil supply is indeed
hanging off a cliff. We estimate global
output is set to contract year-on-year
(YoY) in April or May for the first time
since 1Q13 as OPEC growth no longer
offsets non-OPEC declines,” BofAML said
in the report.
“The drop in supply has come on the back
of massive cuts in global oil and gas
capital expenditure. Our new analysis
points to non-OPEC oil field decline rates
of 4.9 per cent on average this year, up
from 4.2 per cent in 2014. However, as
drilling rigs in non-OPEC countries have
been idled, the Middle East rig count has
held steady.
“So we stick to our view that Brent will
average $61 per barrel in 2017,” said the
BofAML report.
“A key risk to this view is how fast Saudi
and other GCC members decide to
monetise their low cost reserves. For
now, Aramco’s output is relatively flat
compared to last year. With Saudi leaders
pulling out of the oil freeze deal in Doha
last minute, the market keeps second-
guessing their next move.
“Also, disruptions are relatively high at the
moment, suggesting there is room for
production to come back in Libya, Yemen,
or Nigeria if politics allow. But low oil
prices could also trigger strikes and
unrest in producing countries. In short, if
Saudi output remains constant, oil prices
should trend higher,” it concluded.

About Dunio Mabushi

0 comments:

Post a comment